The number of U.S. motorists who say they’d give serious consideration to buying a battery-electric vehicle when next in the market has grown sharply during the last several years, said Steve Carlisle, president of GM’s North American automotive operations.
It couldn’t happen at a better time, the largest of the Detroit automakers set to roll out at least 30 BEVs by 2025. GM CEO Mary Barra has set a target of selling 400,000 battery-powered vehicles next year, with the automaker planning to boost capacity to 1 million BEVs in North America by 2025.
The number of people considering BEVs “is getting very high,” said Carlisle — who also serves as Cadillac brand boss — during a conference sponsored by Citi on Thursday. “In some clinics we can see over 50% of consumers saying they’re willing to consider an EV for their next purchase. And that number is up substantially over the last two or three years.”
Other recent studies back up Carlisle’s optimistic analysis. One of the reasons is the flood of new products that will be available over the coming year. Following the new GMC Hummer EV launched late last year, the Cadillac Lyriq will reach U.S. showrooms in May. It will be followed by electrified versions of the Chevrolet Equinox SUV and Silverado pickups soon afterwards. Carlisle confirmed a battery version of the GMC Sierra pickup will be revealed later this year, and Buick’s first all-electric model for the U.S. market also is due to debut in 2022.
Change is in the wind
During a wide-ranging conversation, Carlisle addressed questions about the many ways GM expects to see its business change this decade.
Among other things, it expects to score significant growth through the sale of new software and digital services. The UltiFi electrical architecture used for GM’s new BEVs will make that particularly easy, though there are opportunities with conventional gas models, as well, especially those capable of taking smartphone-style over-the-air updates.
One example is the semi-autonomous Super Cruise system that first launched on the old Cadillac CT6 sedan. It soon will be offered on 22 different GM models in the U.S., noted Carlisle, with plans to make it an option on all future BEVs and a number of gas models, as well.
“We have in the queue 50-some value-added products and services we’ll be rolling out over the next 36 to 48 months,” said Carlisle.
At a separate conference on Wednesday, GM CEO Barra quoted internal data indicating buyers are willing to spend an average $135 a month for digital services, features and subscriptions — including the necessary hardware. That, she added, should create an annual revenue stream reaching as high as $25 billion by the end of the decade.
That’s in line with what other manufacturers are looking at. In January, Stellantis CEO Carlos Tavares forecast software and related services will generate revenue of 4 billion euros, or $4.5 billion, by 2026, jumping to 20 billion euros, or $22 billion, by 2030.
Buying experience going digital
The internet will play an increasing role in GM’s business Carlisle stressed on Thursday. That includes new online services like CarBravo which aggregates all the used cars GM and its dealers have available.
On the new car side, GM wants to make it easier for buyers to shop whichever way they prefer. While there has been plenty of talk about online buying, “only 11% (of those GM surveyed) say they would prefer to shop exclusively online. And that number has beenn flat over the last several years,” said Carlisle.
Another 71%, he noted, say they want “a mix,” allowing them to do some part of the buying process online but still involve a dealer.
What’s clear, Carlisle stressed, is that the role of GM’s dealers will change in the years ahead. But unlike competitors like Tesla that have downplayed or walked away entirely from the franchise system, Carlisle insisted that, “our dealerships are an untapped strength in our race to EV leadership.”
Short-term problems with long-term impact
While much of the executive’s fireside chat focused on mid to long-term strategy, he turned to more immediate concerns, as well.
It will take time before the semiconductor shortage is fully resolved, said Carlisle, but “all our factories are back on normal operating schedules.”
That said, he warned that GM and the rest of the industry could be impacted by “other events along the way that we haven’t anticipated.”
One event automakers likely hadn’t planned for until recently was the Russian invasion of Ukraine.
The impact is still far from certain, though automakers like Stellantis, Toyota and Volkswagen, with large manufacturing operations in Russia could soon face parts shortages and financial roadblocks as the U.S. and its allies ramp up sanctions.
For its part, however, GM ended its presence in the heart of the old Soviet Union when it sold off its remaining stake in Avtovaz in 2019. It currently sells only a small number of vehicles there and doesn’t source parts from Russia. The country is a big producer of raw materials, however, including the nickel used in BEV batteries.
“We do have some exposure there but something we can mitigate,” said Carlisle, concluding that “our exposure is fairly limited.”
